Electronic Payment Acceptance and Fraud Prevention Boot Camp. Presented by OLIVER P. ORNIDO March 16, 2015

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1 Electronic Payment Acceptance and Fraud Prevention Boot Camp Presented by OLIVER P. ORNIDO March 16, 2015

2 OLIVER P. ORNIDO Product Design and Development, Mobile Payments Smart e-money, Inc.

3 Multi-awarded Services and Globally recognized Innovations (GSMA, MC, and USAID, UN, Telecoms.com) 14 years of experience in the mobile commerce industry A Global Pioneer in Mobile Banking and Mobile Wallet Services OUR VISION To be the leading global digital financial services provider OUR MISSION Transform lives by enabling financial empowerment and well-being

4 Smart e-money Inc. (SMI) is a wholly owned Subsidiary of Smart Communications that provides Domestic and Global Markets for Mobile and Online Financial Services, such as: Money Transfers (Domestic and International) Payments (Commerce and ecommerce) Disbursement (Loans, Salaries, Grants) Mobile Banking (BDO, BPI, Metrobank) Mobile Payment Systems (International)

5 INTERNATIONAL IMPLEMENTATIONS

6 MOBILE E-PAYMENTS

7 SESSION OUTLINE I. What is Mobile Payment II. Transaction Channels Financial Services How consumers get accounts (Issuing) Merchant Enrolment (Acquiring) Service Charges Fraud/Risk Management Q & A

8 What is mobile payment?

9 MOBILE PAYMENTS Point of Sale (POS) made through a mobile device using mobile money An alternative payment channel (APC) of performing a transaction (cashless) Strategy for financial inclusion (FI) of the uncarded & unconnected Simplifies the payment UX

10 MOBILE PAYMENTS Usually involves the following entities: Mobile Network Operator (MNO) Financial Institution (Banks) Non-financial Institution (non-banks) Payment Network (Scheme) Mobile Wallet Providers Technology Partners

11 TRANSACTION PROCESSING

12 MOBILE PAYMENTS

13 Transaction Channels

14 TRANSACTION CHANNELS The point of interaction where the consumer or merchant initiates a financial transaction.

15 User Interface (UI) for Payments 1. SMS/STK 2. USSD Mobile Web (Online) Mobile App (Android, ios) Mobile POS NFC/Bluetooth

16 STK UI CHANNEL

17 Consumer interacts with 30K Centers

18 KEY IMPLEMENTATIONS

19 USSD UI CHANNEL (ETISALAT) QuickTime and a decompressor are needed to see this picture.

20 NFC AS UI CHANNEL (C2P) QuickTime and a decompressor are needed to see this picture.

21 Mobility, Speed, and Simplicity

22 Financial Services

23 Mobile Payment Financial Services 1. Purchase 2. Remittance Money Transfer (P2P) Bills Payment Reload Airtime Encashment Mobile Banking

24 SIMPLE REMITTANCE FLOW

25 PURCHASE TRANSACTION FLOW 1. Consumer transacts through any channel (online or F2F) 2. Consumer account debited & item delivered to consumer Merchant Settled with purchase amount less fees (MDR) the next day

26 BILLS PAYMENT 1. Choose Pay Bills 2. Enter Biller Code 3. Enter Bill Account No.

27 BILLS PAYMENT 4. Enter Amount 5. Enter W-PIN

28 How Consumers get Accounts (Issuing)

29 Know your customer (KYC) 1. Minimum fields 2. Name Present address Date and place of birth Nature of work, name of employer or nature of self-employment / business. Contact details Specimen signature Source of funds Permanent address Nationality TIN, SSS number or Government service insurance number, if any

30 How Consumers Can Get Accounts 1. Register an account (different KYC levels) 2. Sign-up online with minimal KYC ( Have a prepaid or postpaid MNO account (Direct Carrier Billing) Avail more services if KYC is completed (carded)

31 Merchant Enrolment (Acquiring)

32 Business Solutions (Video) QuickTime and a H.264 decompressor are needed to see this picture.

33 SMI s unique value proposition for Growth and Emerging Markets Banks Carded UnCarded Connected Unconnected Connected Free Data Access We have deployed a robust, bank-grade and proprietary emoney Platform, locally and internationally. 07

34 Standard Merchant Requirements 1. The 11 mandatory information 2. Completed Merchant Enrolment Form 3. Valid IDs Business permit BIR Registration Online store (as applicable)

35 Merchant Types 1. Purchase Merchant F2F Online Biller Merchant Agent Merchant (MIMO) Remittance Bills Payment Payment Center

36 Integration Efforts Integration via Payment Page (MePay Checkout) or via API Testing & Development UAT & Sign-off Production Deployment

37 Service Charges

38 SERVICE FEES 1. MIMO - Podium Fees and Percentage Fee (Smart Padala) Purchase Merchant MDR (% depending on MCC) Biller Merchant - Fixed Fee & Percentage fee Direct Carrier Billing - Convenience Fee

39 Smart padala fees

40 Smart padala fees

41 MERCHANT DISCOUNT RATE For every transaction, an MDR is applied which can be a percentage (%) fee of the transaction amount.

42 DIRECT CARRIER BILLING

43

44 P 1,499

45 Fraud and Risk Management

46 Mobile Payment Security 1. Wireless PIN 2. 2-Factor Authentication Security Apps (LockByMobile) 3-Factor Authentication

47 Online Payment Security Tools PCI-DSS Certified MasterCard 3D Secure CSC Verification Check Risk Assessment Module IP Address Location Checking BIN to Country Matching Post-Query Analysis Velocity Check Lock by Mobile Two-Factor Authentication Mobile Wallet Credentials

48 QUESTIONS?

49 THANK YOU VERY MUCH!